Despite a long-running logout campaign by the National Restaurants Association of India (NRAI) protesting food delivery major Zomato’s discounting practices, the company has managed to maintain its growth momentum during the first half of the current financial year (FY2019-20).According to data released by the company, it has recorded more than three-fold increase in overall revenue during the period, clocking $205 million compared to $63 million during the same period last year.
While the company has not disclosed its loss data, it did divulge that it has managed to reduce its cash burn rates by 60 per cent during the period compared to the previous six months and that its earnings before interest, depreciation, tax and amortization (EBIDTA) loss has been reduced by 40 per cent. Analysts note that delivery majors Swiggy and Zomato had been burning upwards of $40-45 million a month last year.
Zomato’s half-yearly report also shows that there has been little impact from the NRAI’s #LogOut program, begun over a month earlier, protesting deep discounting practices by food delivery platforms like Swiggy and Zomato, and the latter’s Gold Infinity Dining program in particular.According to Zomato, the number of restaurants that have signed up for its dine-out Gold programme outweigh those who have left despite the campaign, with the number of its Gold partners rising from 6,100 on August 15 when the campaign had been launched, to 6,300 currently.
“In addition to that, we have 10,000 restaurants that are participating in recently launched Zomato Gold for delivery,” the company said. The NRAI has also protested the extension of its Gold discount programme to deliveries. “Some restaurant owners in India campaigned against Zomato Gold last month (#logout campaign); we engaged with the restaurant owner community and rolled out some changes to the programme that were widely accepted by most restaurants, and users,” Zomato claimed.
The company currently has around 1.4 million members subscribed to the Zomato Gold programme and the food aggregator sees huge scope for growth. “So far, less than five per cent restaurants participate in Zomato Gold, and less than five per cent of our MAUs (monthly active users) are Gold members. There’s so much headroom to grow,’ the company said.
As for its operational metrics during the half year period, the company completed 214 million compared to just 55 million a year ago, with gross merchandise value (GMV) rising to $821 million. “Our order volumes in top 15 cities have doubled in the last 12 months; while the remaining cities already contribute 35 per cent to our order volumes,” it said. Zomato is currently operational in over 500 cities across the country.